Exception: Paper gold is good if you are looking at it only as an investment. If you want to eventually convert it to physical gold for personal use, it might be better to buy jewellery.

10% is the tax on the long-term capital gains from a gold fund if you sell after a year. If sold within a year, the short-term gain is added to your income and taxed accordingly.

1% is the annual fund management fee that a gold fund charges the investors. This charge is deducted on a daily basis from the NAV of the gold fund.

We have all heard about the advantages that gold funds offer to investors in terms of price, liquidity and convenience. However, jewellery also provides unique benefits to the owner. Here are five advantages that ornaments have over paper gold.

If you intend to convert your paper gold holdings into real gold later, you will have to pay the making charges of 5-10% of the value of the gold. It might be better to buy jewellery in the first place.

While goldsmiths readily agree to buy back ornaments purchased from them, they do not easily accept jewellery made by others, even if it is hallmarked. To tide over this hurdle, buy from a big jewellery house that has a wide network of branches and enjoys a good reputation in the market.